Text: HF02391 Text: HF02393 Text: HF02300 - HF02399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 15.329, Code 2001, is amended by adding 1 2 the following new subsection: 1 3 NEW SUBSECTION. 6. Any business located in a renaissance 1 4 zone designated pursuant to section 15E.46 shall be considered 1 5 an eligible business for purposes of sections 15.331 and 1 6 15.331A for the duration of the renaissance zone designation. 1 7 Sec. 2. NEW SECTION. 15E.41 PURPOSE. 1 8 The general assembly finds that a continuing need exists in 1 9 the state for programs to assist certain local governmental 1 10 units in encouraging economic development, the consequent job 1 11 creation and retention, and ancillary economic growth in the 1 12 state. To meet this need, it is necessary to assist and 1 13 encourage the creation of renaissance zones and to provide 1 14 temporary relief from certain taxes within the renaissance 1 15 zones. 1 16 Sec. 3. NEW SECTION. 15E.42 DEFINITIONS. 1 17 As used in this division, unless the context otherwise 1 18 requires: 1 19 1. "Board" means the Iowa economic development board 1 20 created in section 15.103. 1 21 2. "Department" means the Iowa department of economic 1 22 development created in section 15.105. 1 23 3. "Development plan" means a written plan that addresses 1 24 the criteria for designation of a renaissance zone set out in 1 25 section 15E.45. 1 26 4. "Distinct geographic area" means a unique, separate 1 27 geographic area designated by a local governmental unit and 1 28 subject to the size limitations in section 15E.43. 1 29 5. "Local governmental unit" means a county, city, or 1 30 township. 1 31 6. "Qualified local governmental unit" means either of the 1 32 following: 1 33 a. A county. 1 34 b. A city or township that contains an urban renewal area 1 35 as defined in section 403.17. 2 1 7. "Renaissance zone" means a geographic area so 2 2 designated by the board under this division. 2 3 8. "Rural area" means an area that lies outside the 2 4 boundaries of an urban area. 2 5 9. "Urban area" means a contiguous distinct geographic 2 6 area within one or more cities with a population of twenty- 2 7 five thousand or more. 2 8 Sec. 4. NEW SECTION. 15E.43 QUALIFICATIONS. 2 9 1. A qualified local governmental unit may apply to the 2 10 board to designate the qualified local governmental unit or 2 11 part thereof as a renaissance zone if all of the following 2 12 criteria are met: 2 13 a. The geographic area of the proposed renaissance zone is 2 14 located within the boundaries of the qualified local 2 15 governmental unit. 2 16 b. The application includes a development plan. 2 17 c. The proposed renaissance zone is not more than five 2 18 thousand acres in size. 2 19 d. The proposed renaissance zone does not contain more 2 20 than ten distinct geographic areas. The minimum size of a 2 21 distinct geographic area is five acres. A distinct geographic 2 22 area may include, but shall not consist solely of, publicly 2 23 owned land. 2 24 e. The application includes the proposed duration of 2 25 renaissance zone status, which shall not exceed fifteen years. 2 26 f. The written approval of the governing body of the 2 27 qualified local governmental unit applying for the designation 2 28 and the governing body of the local governmental unit in which 2 29 the proposed renaissance zone would be located. 2 30 2. A qualified local governmental unit shall not be a part 2 31 of more than one renaissance zone. 2 32 3. A qualified local governmental unit shall not have more 2 33 than one application under consideration by the board at any 2 34 time. 2 35 4. A qualified local governmental unit may apply to the 3 1 board to amend the distinct geographic areas within a 3 2 designated renaissance zone provided that the total number of 3 3 distinct geographic areas within the renaissance zone does not 3 4 exceed ten distinct geographic areas. 3 5 5. A qualified local governmental unit may apply to the 3 6 board to extend the duration of renaissance zone status for 3 7 any distinct geographic area in a renaissance zone or for an 3 8 entire renaissance zone. Renaissance zone status shall not be 3 9 extended past June 30, 2022. 3 10 Sec. 5. NEW SECTION. 15E.44 DUTIES OF THE BOARD. 3 11 1. Applications for designation as a renaissance zone must 3 12 be submitted between July 1, 2002, and January 1, 2003. The 3 13 board shall review all applications submitted and determine 3 14 which applications meet the criteria contained in section 3 15 15E.45 between January 1, 2003, and February 28, 2003. 3 16 2. The board shall do all of the following: 3 17 a. Designate renaissance zones no later than February 28, 3 18 2003. 3 19 b. Subject to subsection 3, approve or reject the duration 3 20 of renaissance zone status as submitted in the application, 3 21 which shall not exceed fifteen years. 3 22 c. Subject to subsection 3, approve or reject the 3 23 geographic boundaries and the total area of the renaissance 3 24 zone as submitted in the application. 3 25 3. The board shall not alter the geographic boundaries of 3 26 the renaissance zone or the duration of the renaissance zone 3 27 status described in the application unless the qualified local 3 28 governmental unit in which the renaissance zone is to be 3 29 located consents by resolution to the alteration. 3 30 Sec. 6. NEW SECTION. 15E.45 CRITERIA. 3 31 1. In making a determination regarding the designation of 3 32 a renaissance zone, the board shall consider all of the 3 33 following criteria: 3 34 a. Evidence of adverse economic and socioeconomic 3 35 conditions within the proposed renaissance zone. 4 1 b. The viability of the development plan. 4 2 c. Whether the development plan is creative and innovative 4 3 in comparison to other applications. 4 4 d. Public and private commitment to and other resources 4 5 available for the proposed renaissance zone. 4 6 e. How renaissance zone designation would relate to a 4 7 broader plan for the community as a whole. 4 8 f. The level of demonstrated cooperation from surrounding 4 9 communities. 4 10 g. How the local regulatory burden will be eased for 4 11 businesses operating in the proposed renaissance zone. 4 12 h. Public and private commitment to improving abandoned 4 13 real property. 4 14 i. Any other information required by the board. 4 15 2. Applications which include new business activity shall 4 16 receive priority consideration. 4 17 3. The board shall not designate an area as a renaissance 4 18 zone unless, as a part of the application, the qualified local 4 19 governmental unit provides to the board a copy of a resolution 4 20 adopted by the governing body of the qualified local 4 21 governmental unit and each local governmental unit, within 4 22 which the proposed renaissance zone is to be located, that 4 23 states, if the renaissance zone designation is granted, that 4 24 persons and property within the renaissance zone will be 4 25 exempt from property taxes levied by that local governmental 4 26 unit for the duration of renaissance zone status. 4 27 Sec. 7. NEW SECTION. 15E.46 DESIGNATION OF RENAISSANCE 4 28 ZONES. 4 29 1. Pursuant to section 15E.44, the board shall not 4 30 designate more than eleven renaissance zones within the state. 4 31 Not more than five of the renaissance zones shall be located 4 32 in urban areas and not more than six of the renaissance zones 4 33 shall be located in rural areas. For purposes of determining 4 34 whether a renaissance zone is located in an urban area or a 4 35 rural area under this section, if any part of the renaissance 5 1 zone is located within an urban area, the entire renaissance 5 2 zone shall be considered to be located in an urban area. 5 3 2. In addition to the renaissance zones in subsection 1, 5 4 the board may, on its own motion, designate an additional five 5 5 renaissance zones for agricultural processing facilities if 5 6 the governing body of the qualified local governmental unit 5 7 and each local governmental unit, within which the proposed 5 8 renaissance zone is to be located, agrees pursuant to a 5 9 resolution. A renaissance zone designated pursuant to this 5 10 subsection shall consist of one continuous distinct geographic 5 11 area. The board may revoke the renaissance zone designation 5 12 for all or a portion of a renaissance zone designated pursuant 5 13 to this subsection if the board determines that the 5 14 agricultural processing facility fails to commence operation 5 15 or ceases operation in the renaissance zone. 5 16 3. A renaissance zone approved and designated by the board 5 17 shall become effective on March 1, 2003. 5 18 Sec. 8. NEW SECTION. 15E.47 TAX INCENTIVES. 5 19 1. All of the following incentives shall be available 5 20 during the duration of renaissance zone designation: 5 21 a. All residents within the renaissance zone shall be 5 22 exempt from paying personal income taxes under chapter 422, 5 23 division II. 5 24 b. A taxpayer with a business located in a renaissance 5 25 zone shall be exempt from corporate income tax under chapter 5 26 422, division III, on the portion of net income reasonably 5 27 attributable to the trade or business or sources within the 5 28 renaissance zone. The method of attributing net income 5 29 received from within the renaissance zone and net income 5 30 received from outside the renaissance zone shall be calculated 5 31 in a similar manner to that used in section 422.33, subsection 5 32 2. A taxpayer with an office of a financial institution 5 33 located in a renaissance zone shall also be exempt from the 5 34 franchise tax in chapter 422, division V, on the portion of 5 35 net income received through the business activity in offices 6 1 located in the renaissance zone as determined by rules adopted 6 2 by the director of revenue and finance pursuant to section 6 3 422.65 on allocating the franchise tax. 6 4 c. All taxpayers owning property within the renaissance 6 5 zone shall be exempt from paying local property taxes on the 6 6 property located solely in the renaissance zone as provided in 6 7 section 427.1, subsection 34. This incentive shall not be 6 8 available to owners of residential rental property located in 6 9 the renaissance zone in tax years in which the property is not 6 10 in substantial compliance with all applicable state and local 6 11 zoning, building, housing, and health laws, ordinances, or 6 12 codes. 6 13 d. The tax imposed on the gross receipts from the sale, 6 14 furnishing, or service of gas, electricity, water, and heat to 6 15 persons in the renaissance zone shall be exempted as provided 6 16 in section 422.45, subsection 63. 6 17 e. A business located in a renaissance zone shall be 6 18 eligible to receive, for businesses located within the 6 19 renaissance zone, the new jobs credit from withholding, as 6 20 provided in section 15.331, and the sales, services, and use 6 21 tax refund, provided in section 15.331A. 6 22 2. During the last three years that the taxpayer is 6 23 eligible for an exemption, refund, or credit described in this 6 24 section, the exemption, refund, or credit shall be reduced by 6 25 the following percentages: 6 26 a. For the tax year that is two years before the final 6 27 year of designation as a renaissance zone, the reduction shall 6 28 be twenty-five percent. 6 29 b. For the tax year immediately preceding the final year 6 30 of designation as a renaissance zone, the reduction shall be 6 31 fifty percent. 6 32 c. For the tax year that is the final year of designation 6 33 as a renaissance zone, the reduction shall be seventy-five 6 34 percent. 6 35 Sec. 9. NEW SECTION. 15E.48 EXCEPTIONS. 7 1 1. A taxpayer shall not be eligible for the incentives 7 2 provided in section 15E.47 during any tax years in which the 7 3 taxpayer is delinquent in paying any federal, state, or local 7 4 taxes. 7 5 2. A taxpayer shall not be eligible for the incentives 7 6 provided in section 15E.47 during any tax years in which the 7 7 taxpayer owns residential rental property that is not in 7 8 substantial compliance with all applicable state and local 7 9 zoning, building, and housing laws, ordinances, or codes. 7 10 3. An individual who is a resident of a renaissance zone 7 11 is eligible for an exemption, refund, or credit under section 7 12 15E.47 only until the department of revenue and finance 7 13 determines that the aggregate state and local tax revenue 7 14 forgone as a result of all exemptions, refunds, or credits 7 15 granted under section 15E.47 to that individual reaches ten 7 16 million dollars. 7 17 4. A business located in a qualified local governmental 7 18 unit that relocates from outside a renaissance zone into a 7 19 renaissance zone in that same qualified local governmental 7 20 unit shall not receive the exemptions, refunds, or credits 7 21 provided in section 15E.47 unless the governing body of the 7 22 qualified local governmental unit in which the renaissance 7 23 zone is located approves the relocation of the business. 7 24 5. If a business relocates more than twenty-five full-time 7 25 equivalent jobs from one or more local governmental units 7 26 other than a local governmental unit in which a renaissance 7 27 zone is located to a local governmental unit within a 7 28 renaissance zone, the business shall notify the department of 7 29 economic development and the local governmental unit or units 7 30 from which the jobs are being relocated of the relocation. 7 31 The business is not eligible for the exemptions, refunds, or 7 32 credits provided in section 15E.47 if the local governmental 7 33 unit from which the jobs are being relocated adopts a 7 34 resolution objecting to the relocation of the jobs within 7 35 sixty days after the notification by the business. The 8 1 business becomes eligible for the exemptions, refunds, and 8 2 credits provided in section 15E.47 sixty days after the 8 3 notification if the local governmental unit failed to object 8 4 or if the local governmental unit has objected to the 8 5 relocation when the local governmental unit rescinds its 8 6 objection by resolution. A local governmental unit that 8 7 objects to the relocation of jobs shall file a copy of all 8 8 resolutions of objections and rescission with the department 8 9 of revenue and finance, the department of economic 8 10 development, and the local governmental units that designated 8 11 the renaissance zone into which the jobs are transferred. 8 12 Sec. 10. NEW SECTION. 15E.49 APPLICATION FORM. 8 13 The form of the application for a renaissance zone 8 14 designation shall be as specified by the department. At a 8 15 minimum, the application form shall incorporate the criteria 8 16 listed in section 15E.45. The board may request any 8 17 information from an applicant, in addition to that contained 8 18 in an application, as may be needed to permit the board to 8 19 discharge its responsibilities under this division. 8 20 Sec. 11. NEW SECTION. 15E.50 REPORTING. 8 21 By January 15 of each year, the board shall file a report 8 22 with the general assembly which includes, but is not limited 8 23 to, all of the following: 8 24 1. The number of new jobs created in renaissance zones. 8 25 2. The percentage change in value of property located in 8 26 renaissance zones. 8 27 3. The average wage of new jobs created in renaissance 8 28 zones. 8 29 4. The percentage change of adjusted gross income of 8 30 residents located in renaissance zones. 8 31 Sec. 12. NEW SECTION. 15E.51 RULES. 8 32 The department shall adopt rules pursuant to chapter 17A 8 33 regarding the specific requirements for development plans and 8 34 application forms. 8 35 Sec. 13. Section 257.4, Code Supplement 2001, is amended 9 1 by adding the following new subsection: 9 2 NEW SUBSECTION. 1A. Each year, the department of 9 3 management shall make the computations in this subsection for 9 4 any school district in which a renaissance zone designated 9 5 pursuant to section 15E.44 is located. The department shall 9 6 compute a property tax levy rate based on the total of all 9 7 taxable property in the school district plus the property 9 8 exempt due to the renaissance zone. The department shall 9 9 multiply the computed levy rate by the value of the taxable 9 10 property in the school district to determine the dollar amount 9 11 that will be raised through the property tax levy. The 9 12 department shall subtract that dollar amount from the dollar 9 13 amount needed to be raised as computed in subsection 1. The 9 14 remainder shall be considered supplementary aid under section 9 15 257.16. 9 16 Sec. 14. Section 257.16, unnumbered paragraph 1, Code 9 17 2001, is amended to read as follows: 9 18 There is appropriated each year from the general fund of 9 19 the state an amount necessary to pay the foundation aid and 9 20 supplementary aid under section 257.4,subsectionsubsections 9 21 1A and 2. 9 22 Sec. 15. Section 422.45, Code Supplement 2001, is amended 9 23 by adding the following new subsection: 9 24 NEW SUBSECTION. 63. The gross receipts from the sale, 9 25 furnishing, or service of gas, electricity, water, and heat to 9 26 persons located in a renaissance zone designated pursuant to 9 27 chapter 15E for the duration of the renaissance zone 9 28 designation. 9 29 Sec. 16. Section 427.1, Code Supplement 2001, is amended 9 30 by adding the following new subsection: 9 31 NEW SUBSECTION. 34. RENAISSANCE ZONES. The property 9 32 located solely in a renaissance zone designated pursuant to 9 33 chapter 15E for the duration of the renaissance zone 9 34 designation. 9 35 Sec. 17. APPLICABILITY. The sales tax incentive for 10 1 utilities in section 8 of this Act is applicable to all 10 2 billing cycles beginning on or after January 1, 2003. Section 10 3 8 of this Act shall not apply to billing cycles beginning 10 4 after December 31, 2017. 10 5 EXPLANATION 10 6 This bill provides for the establishment of a program 10 7 designating renaissance zones to assist local governments in 10 8 encouraging economic development by providing certain tax 10 9 exemptions, refunds, and credits. 10 10 The bill provides that applications for a designation of a 10 11 renaissance zone may be made to the Iowa economic development 10 12 board by a qualified local governmental unit which is defined 10 13 as either a city or township that contains an urban renewal 10 14 area or a county. Included in the application must be a 10 15 development plan, proposed boundaries of the zone which must 10 16 be located within the qualified local governmental unit, the 10 17 proposed duration of the designation which shall not exceed 15 10 18 years, and written approval of the city council and county 10 19 board of supervisors. The bill provides that a qualified 10 20 local governmental unit shall not be part of more than one 10 21 renaissance zone and shall not have more than one application 10 22 under consideration by the board. The bill provides that a 10 23 qualified governmental unit may apply to amend a renaissance 10 24 zone or to extend the duration of renaissance zone status. 10 25 The bill provides that applications must be submitted 10 26 between July 1, 2002, and January 1, 2003. The board shall 10 27 review all applications submitted and shall designate 10 28 renaissance zones by February 28, 2003. The board shall not 10 29 alter the boundaries or duration of a renaissance zone 10 30 described in the application unless the qualified local 10 31 governmental unit and the local governmental unit in which the 10 32 renaissance zone is to be located consent by resolution. The 10 33 bill provides that criteria in determining designations of 10 34 renaissance zones shall include: 10 35 1. Evidence of adverse economic and socioeconomic 11 1 conditions. 11 2 2. The viability of the plan. 11 3 3. Whether the development plan is creative and 11 4 innovative. 11 5 4. Public and private commitment to and other resources 11 6 available for the zone. 11 7 5. How the plan relates to a broader plan for the 11 8 community as a whole. 11 9 6. The level of demonstrated cooperation from surrounding 11 10 communities. 11 11 7. How the local regulatory burden will be eased for 11 12 businesses operating in the zone. 11 13 8. Commitment to improving abandoned real property. 11 14 9. A resolution from the governing body of the local 11 15 governmental unit stating that if the renaissance zone 11 16 designation is granted, persons and property within the 11 17 renaissance zone are exempt from property taxes. 11 18 Applications which include new business activity shall 11 19 receive priority consideration. 11 20 The bill provides that the board shall not designate more 11 21 than a total of 11 zones, not more than five of which may be 11 22 located in urban areas and not more than six of which may be 11 23 located in rural areas. The bill provides that the board may, 11 24 on its own motion, designate an additional five renaissance 11 25 zones for agricultural processing facilities if the governing 11 26 body of the qualified local governmental unit and each local 11 27 governmental unit, within which the proposed renaissance zone 11 28 is to be located, agrees pursuant to a resolution. The bill 11 29 provides that the board may revoke the renaissance zone 11 30 designation for all or a portion of an agricultural facility 11 31 renaissance zone designated if the board determines that the 11 32 agricultural processing facility fails to commence operation 11 33 or ceases operation in the renaissance zone. The bill 11 34 provides that any renaissance zone approved and designated by 11 35 the board shall become effective on March 1, 2003. 12 1 The bill provides the following tax incentives: 12 2 1. Exemption from personal net income tax to residents 12 3 living in the zone. 12 4 2. Exemption from corporate and franchise taxes for 12 5 businesses located within the renaissance zone on the portion 12 6 of income attributed to the businesses located within the 12 7 zone. 12 8 3. Exemption from local property tax. 12 9 4. Exemption from state sales tax on utilities. 12 10 5. The sales, services, and use tax refund, provided in 12 11 Code section 15.331A, and the new jobs credit from 12 12 withholding, provided in Code section 15.331, for businesses 12 13 located within a zone. 12 14 The bill provides that the tax incentives shall be phased 12 15 out during the final three years of the renaissance zone 12 16 designation. 12 17 The bill provides for exceptions to the tax incentives for 12 18 tax delinquency, business relocation into a renaissance zone 12 19 under some circumstances, and when tax incentives received by 12 20 an individual accumulate to $10 million during a designation 12 21 of a renaissance zone. 12 22 The bill provides that the department of economic 12 23 development shall specify the application form and the board 12 24 may request any additional information not included on the 12 25 form. 12 26 The bill provides that, by January 15 of each year, the 12 27 board shall file a report with the general assembly which 12 28 includes, but is not limited to, the number of new jobs 12 29 created in renaissance zones, the percentage change in value 12 30 of property located in renaissance zones, the average wage of 12 31 new jobs created in renaissance zones, and the percentage 12 32 change of adjusted gross income of residents located in 12 33 renaissance zones. 12 34 The bill requires the department of management to annually 12 35 compute the dollar amount that a school district would lose 13 1 due to the exemption of property in a renaissance zone from 13 2 property tax. The bill provides that the lost dollar amount 13 3 is paid to school districts from the state general fund in the 13 4 form of supplementary aid. 13 5 An applicability date is provided for the exemption on 13 6 state sales tax on utilities. 13 7 LSB 5471HH 79 13 8 tm/cf/24.2
Text: HF02391 Text: HF02393 Text: HF02300 - HF02399 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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